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Posted at December 17, 2016 20:26 by Vincent Valdez in Trendsetter

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How to Make Money Trading Stocks Online 

First of all, before discussing the topic on how to make money trading stocks online, there is a need to explain what stock trading is all about. Stocks refer to the initial capital or investment that the founders of a company have spent to put up a company. It serves as an excellent security to creditors when it comes to the money that they loaned from companies. It cannot be withdrawn, and therefore cannot be consumed or spent by a company. Stocks serve as collaterals, a guarantee that creditors could still get the money they loaned to companies through the initial capital that they could still seize in case of company closure or bankruptcy.

If an investor buys stocks from a company, he would be a stockholder of that institution, which basically means he becomes one of the owners of the company. One's position or influence within the company would entirely depend on the amount of stocks he has, and therefore, if his shares of stocks are not a considerable amount, he would have a very little voice in making company decisions and policies. The profit from owning stocks comes from the dividend that companies pay to their stock holders. Dividends are portions of corporate profits that are shared to stockholders. Strictly speaking, if the company increases in profit due to good performance, dividends of shareholders increase as well. Value of the stocks of a company follows the growth or decline of its profit. Value of stocks of a good performing company is higher than a poorly performing one. Stock traders buy stocks of a company with high hopes that someday that company would progress so that they could resell their stocks in a profitable fashion.

In the past, buying or selling stocks in a stock exchange market would require one to get in touch with a broker. A broker is an individual who mediates between a stock buyer and a seller. Now, with the utilization of the internet, people could learn how to make money trading stocks online, and brokers would no longer be needed in buying or selling stocks. This is because clients could now personally make those transactions via electronic trading. However, if one would desire to be assisted by a broker, he could still be allowed to have one, after all, some electronic orders are still routed to brokers. Trading stocks online is also popularly known as electronic trading. Electronic trading does not only trade stocks, it also trade securities like bonds, banknotes, and debentures. By using electronic trading (e-trading for short), one would need to create a personal brokerage account in the Internet by accessing a broker dealing company's website. These websites would be the link of a buyer or a seller to the stock exchange market, and without them one could not trade stocks.

The main advantage in knowing how to make money trading stocks online is that it minimizes trading transactions of stocks significantly. It makes it easier for stock holders to communicate and therefore trade stocks. Through online trading, traders are also given the capacity to monitor their transactions, giving them better opportunities to make the right decision on stock trades.